Great Portland Estates is planning to bring a partner on board to bring forward a development on the coveted West End Royal Mail development site.
Speaking at the Estates Gazette fourth annual Investment Summit, portfolio director Neil Thompson said it was “probable and possible” that the REIT would put the £120m site at 35-50 Rathbone Place, W1, into a joint venture to reduce its development exposure.
He said: “There is the potential for a joint venture for the site to assist with capital expenditure requirements in the next five years, which could be around £350m.
“The long project duration also means it is probable and possible that we will look for a joint venture to share the risk and the benefit of this site over the next few years.”
Thompson added that there was also a possibility of another party coming on board at 100 Bishopsgate – which it is developing with Brookfield.
He said the 50:50 joint venture would not be speculatively built and needed a prelet of 30-50% of the available floorspace to allow the partners to get bank finance of around 50-60% of development costs.
“The remaining 40-50% of equity will come from us and Brookfield and, if we need to bring in another partner, we will do that. It is a decision we will make over the next few months,” said Thompson.
bridget.o’connell@estatesgazette.com
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